The Economics of Inequality and the Environment
Year: 2025
Type: article
Abstract: Environmental degradation and economic inequality are two of the defining challenges of the twenty-first century. We synthesize conceptual mechanisms that underpin inequality-environment interlinkages and take stock of the relevant empirical evidence. We propose three channels of interaction, describing, first, how the cost of environmental policy is distributed across households, second, how environmental benefits vary with household income, third, how income inequality and redistribution shape environmental outcomes. The three channels determine how both environmental quality and economic inequality matter for policy appraisal. We argue that it is crucial to consider inequality-environment interlinkages in economic research and policy design, as neither issue can be fully understood in isolation, and close by highlighting future research needs.
Source: Journal of Economic Literature
DOI: 10.1257/jel.20241696
Institutions: Center for Economic and Policy Research, Universität Hamburg, ETH Zurich, University of Gothenburg, Christian-Albrechts-Universität zu Kiel, Potsdam Institute for Climate Impact Research, German Centre for Integrative Biodiversity Research, Leipzig University, École Supérieure des Sciences Économiques et Commerciales, ESSEC Business School
Language: English
Subfield: Economics and Econometrics
Domain: Social Sciences
Open Access status: green
Funders: European Commission, Deutsche Forschungsgemeinschaft, Agence Nationale de la Recherche, Svenska Forskningsrådet Formas, Bundesministerium für Bildung und Forschung, Universität Hamburg, Deutsches Zentrum für integrative Biodiversitätsforschung Halle-Jena-Leipzig, Agencia Estatal de Investigación
Awards: G1770639145, G204579599, G211635838, G2519418911, G4150083710, G4617990, Assessment of Cross(X)-sectoral climate Impacts and pathways for Sustainable transformation, EXC 2037: Climate, Climatic Change, and Society (CLICCS), G5632166549, Verbundprojekt ValuGaps: (Umfassende Inwertsetzung von Naturkapital in Deutschland: Ansätze und Methoden zum Umgang mit knapper Information und Unsicherheiten), Teilprojekt 2: Ermittlung von Präferenzen und Erwartungen von Interessengruppen für ein besseres Verständnis von Naturkapitalwerten, FZT 118: Deutsches Zentrum für integrative Biodiversitätsforschung (iDiv), Verbundprojekt AXIS: Klimaschäden und Klimapolitik in heterogenen Gesellschaften (CHIPS) - Teilprojekt 1: Neue Schadensfunktionen und Verteilungseffekte in Integrierten Bewertungsmodellen, G7522661752, G8663450563
OpenAlex ID: W4413828468